Source: Reuters (via feed)
The India rupee rose sharply on Monday. This followed the local central bank tightening limits on banks’ foreign exchange (FX) positions. The move could prompt a wave of onshore dollar selling. Traders may rush to cut arbitrage positions amid the new FX position caps. The RBI’s limits affect banks’ FX holdings. The rupee’s rebound occurred as market participants adjusted to the new rules.
BizTrendWire Insight:
The RBI’s FX position limits directly relate to banks’ foreign exchange holdings. This change coincided with the rupee’s sharp rebound.
The RBI’s FX position limits directly relate to banks’ foreign exchange holdings. This change coincided with the rupee’s sharp rebound.
